Dutch Government Seeks Public Input On Crypto Tax Reporting Laws

According to Cointelegraph, the Dutch government has requested public feedback on proposed legislation that would mandate crypto service providers, such as exchanges, to collect and share user data with the local tax authority. This move aims to align with European Union regulations and enhance transparency regarding cryptocurrency ownership to prevent tax avoidance and evasion, as stated by the Netherlands Ministry of Finance in an Oct. 24 press release. The ministry clarified that the proposed rules would not change the current obligations for crypto owners, who are already required to report their holdings to the country's tax authority, the Belastingdienst. The new bill would enable the tax agency to share data collected by service providers about residents of other EU countries with the respective tax authorities of those nations, in accordance with the EU-wide crypto tax reporting rules adopted last year, known as DAC8. The rules are designed to minimize the administrative burden on crypto service providers, as they would only need to report in the EU member state where they are registered. While Dutch crypto owners must pay taxes on their holdings like any other investment, the Finance Ministry noted that EU tax authorities currently lack sufficient insight into crypto, resulting in an uneven playing field in the financial sector. Folkert Idsinga, the state secretary for tax affairs and the tax administration, emphasized the significance of the bill in advancing the taxation of cryptocurrencies. He stated that future data exchanges would make crypto transactions transparent to tax authorities, thereby preventing tax avoidance and evasion, and ensuring that European governments do not miss out on tax revenues. The Netherlands was among the 47 countries that implemented the Crypto-Asset Reporting Framework (CARF) from the Organisation for Economic Cooperation and Development (OECD) in November. The proposed legislation also stipulates that data collected by crypto service providers would be shared with non-EU nations that have signed on to the CARF, including the United States, the United Kingdom, Canada, Australia, Singapore, and others. Public opinions, advice, and comments on the proposed rules are due by Nov. 21, with the government aiming to submit the bill to the country's House of Representatives in the second quarter of 2025.